Phoenix Copper. Regulatory News (PXC)

Phoenix Copper Limited / Ticker: PXC / Sector: Mining

23 January 2020

Phoenix Copper Limited (the "Company" or "Phoenix")

Red Star vein strike length extended to 320-metres and open on both ends

Two additional veins identified in road cuts

Phoenix Copper Ltd (AIM: PXC, OTCQX: PGMLF), the AIM quoted North American focused base and precious metals exploration and development company, is pleased to announce the results of ongoing exploration at the Company's Red Star silver deposit, ("Red Star" or the "Red Star Zone") adjacent to the Company's Empire copper deposit in Idaho, USA.

Sampling Programme Highlights

·; Red Star vein now measured along 320m - open at both ends

·; Surface sampling results returned similar values to those from the outcrop that forms the current maiden NI 43-101 Resource

·; Two additional veins have been exposed to the southeast

·; All of the new vein exposures are situated on the patented Empire property

·; These results will now be used to identify further drill targets

·; Objective to continue to update the Red Star Resource in preparation for construction and production which is expected in 2021

·; A map showing the relevant Red Star vein system can be found on the website version of this press release at www.phoenixcopperlimited.com/news.

 Ryan McDermott, Chief Executive Officer, commented:

"We are pleased with the latest Red Star results which indicate an open-ended extension to the Red Star vein of 320-metres. Additionally, during the Q4 2019 drill road-building work, two additional veins were identified. These new veins are particularly exciting as they may be indicative of a much larger, multi-vein shear zone. 

"During 2020 the Company plans to complete a drilling programme on Red Star to generate a Measured and Indicated resource sufficient to justify a small underground "adit" mine with a flotation process plant to produce lead-silver, copper-gold and zinc concentrates. The scale of operations will be in the region of 450 tonnes of ore a day or 155,000 tonnes a year.

"The Red Star discovery is a primary high-grade silver/lead sulphide vein and has, after drilling only three holes, generated a maiden NI 43-101 compliant resource of 103,500 tonnes, containing half a million ounces of silver or a silver equivalent resource of 1.6 million ounces when gold, lead, copper and zinc values are included. The value of the contained metal in the NI 43-101 Red Star resource is US$260/tonne of ore at today's metal prices, or US$40.3 million a year at a production rate of 155,000 tonnes of ore a year. Capital costs are anticipated to be in the region of US$30 million.

"Whilst our focus will be production from Red Star, anticipated in 2021, the Company will also be evaluating alternatives for the Empire Mine's open pit copper project in an attempt to improve on the revenue, operating and capital cost estimates. The completion of the feasibility study for this project will be accelerated in a more attractive copper price environment.

"My predecessor, Dennis Thomas, has pointed out many times that the polymetallic nature of the Empire System is largely untapped and barely exploited or explored. These latest results are certainly consistent with this view. I would like to take this opportunity to personally thank Dennis for his service to the Company as the former CEO and thank him in advance for his future contribution as VP Investor Relations."

Red Star Zone

The Red Star Zone is located approximately 330 metres north-northwest of the Empire open-pit resource area within the Empire patented claim boundary. This boundary is contiguous with the Company's unpatented Horseshoe Block to the north and west.

The Red Star vein was discovered as a single vein outcrop (discovery outcrop) in 2018 during a field mapping and reconnaissance of the northern patented claim boundary and adjacent Horseshoe Block. Geological and structural mapping in the vicinity of the discovery outcrop indicated a N30E to N40E strike dipping 80 degrees north west. The lack of any surface outcropping, besides the discovery outcrop, made it necessary to excavate road cuts through the 2.0 metre to 5.0 metre thick overburden in order to expose the uppermost sub-crop of the underlying rocks.

Following the 2018 discovery, the lone discovery outcrop was sampled by cutting one continuous channel comprised of 12 times 1.5 metre long samples. The assay results were reported on 30 October 2018. Silver values in the individual channels ranged from 3.0 g/t ("grammes per tonne") to 78.5 g/t, lead ranged from 0.010% to 0.354% and zinc from 0.038% to 0.278%. Gold values were anomalous, and manganese values were high at 0.379% to 0.837% compared to the surrounding unmineralized rock (Table 1).

Apart from the discovery outcrop, no other significant outcrops exist in the Red Star area. In October and November 2019 approximately 2,000 metres of drill access roads were constructed throughout the Red Star Zone with the intent of crossing the vein system and exposing sub-crops beneath the 2.0 metre to 5.0 metre thick overburden along the anticipated strike of the vein. Visibly mineralized sub-crops were exposed in seven road cuts. The geology and geochemistry of the sub-crop intercepts were consistent with the 2018 discovery outcrop channel with silver values ranging from 0.5 g/t to 18.5 g/t, lead ranging from 0.001% to 0.705%, and zinc from 0.011% to 1.361%. Gold was anomalous, and manganese 0.031% to 0.769%. (Table 2). The wider variation in the recent channel sampling results is likely to be due to the highly weathered and broken sub-crop that was exposed in the road cuts.

The samples were analysed using 33-element ICP. Silver values above 1 ppm ("parts per million"), and manganese values above 1,000 ppm were significant in the discovery outcrop channel sampling in 2018, as they were indicative of high grade silver and lead below, as proven by subsequent drilling. The 2019 channel samples are indicative of the same and demonstrate the potential for further high grade silver and lead.

Three RC drill holes were completed in the area of the 2018 discovery outcrop, with two of the holes, KX18-55 and KX18-57, intersecting the primary Red Star vein at initial depths of 15 metres and 30 metres, respectively. The assays for those drill holes are shown in Tables 3 and 4, below.

Contacts

For further information please visit www.phoenixcopperlimited.com or contact:

Notes

Phoenix Copper Limited is a North American focused, base and precious metal explorer and developer, which has carried out a drilling programme and generated a copper, gold, silver and zinc resource on which it is carrying out a feasibility study to bring the historically producing Empire Mine in Idaho, USA, back into production. It is also evaluating the silver and gold resources around three other past producing mines within the 23 km2 Empire claims block as well as cobalt in two claims blocks north of Empire in Idaho.

Phoenix's primary operations are focused near Mackay, Idaho in the Alder Creek mining district. This district includes the historical Empire, Horseshoe, White Knob and Blue Bird Mines, past producers of copper, gold, silver, zinc, lead and tungsten from underground mines in the first half of the twentieth century. Additionally, the district includes Navarre Creek a Carlin-trend gold discovery which hosts a 6.1 km gold strike length within a 9.8 km² area.

Phoenix acquired an 80% interest in the historical Empire Mine property in 2017 and, based on a total of 320 drill holes, an oxide resource was completed in late 2017. A NI 43-101 compliant PEA (preliminary economic assessment) for an open pit heap leach solvent extraction and electrowinning ("SX-EW") mine was completed in April 2018. In 2018 a further 8,600 metres in 93 holes was completed to upgrade the oxide resources, provide samples for ongoing metallurgical test work, geotechnical and hydrological studies and condemnation drilling for the heap leach pad site, waste dump and plant site. An updated NI 43-101 compliant resource was completed in early May 2019.

Since acquiring the Empire project, Phoenix has increased the claim area from 818 acres to 5,717 acres, mainly to the northwest and west, and in so doing has increased the potential for additional oxide and sulphide copper resources, as well as the potential for stand-alone gold and silver resources, along a strike length of approximately 5.4 km towards the other brownfield mines of the Horseshoe, White Knob and Blue Bird Mines now within the property boundary. In particular, a new discovery at Red Star, 330 metres north west of the Empire Mine proposed open pit, has revealed sulphide ore and from three shallow exploration drill holes a NI 43-101 compliant maiden resource of 1.6 million silver equivalent ounces was reported.

At Empire, it is estimated that less than 1% of the potential ore system has been explored to date and, accordingly, there is significant opportunity to increase the resource through phased exploration.

More details on the Company, its assets and its objectives can be found on PXC's website at www.phoenixcopperlimited.com.